Economic Systems

I.Many of the things we take for granted in our life are difficult for everyone to produce
individually

A.Imagine life where you had to produce everything yourself.

1.That car you drove to services, would you be able to put one together
yourself?

2.What if that also required that you designed and manufactured the parts
yourself?

3.What if you had to gather the raw materials for the parts?

4.Oh, and the gas that it uses ... imagine cooking that up in your backyard
from crude oil.

B.Hard to imagine it because we are individually limited

1.Limited in our education, skills, and, most importantly, time

C.Hence, we specialize. I produce things that I’m good at and exchange those things
with the products you produce.

1.How that exchange takes place is the basis of various economic systems

2.No pure economic system exists in the world

a.Pure economic systems are theories

b.They break down a piece of the exchanges going on and describe
why they are acceptable to the participants

3.In every country and in every age a variety of systems are used
simultaneously

4.Generally, when we speak of an economic system of a country, we speak
of the dominate one that exists.

D.Various systems are popular or unpopular with individuals. At times I’ll hear
Christians talk of the merits or demerits of various systems.

1.For example, communism is a system that many people loved to hate.

2.What disturbs me is when Christians begin to think that their favored
system is the only acceptable system

3.For example, whole denominations were created around the denial of
private ownership of goods.

II.Types of Economic Systems

A.Market Economy

1.Operates by voluntary exchange. It is not planned or controlled by a central
authority

2.Anarchism: A complete rejection of any central authority, such as
government. Individuals should have complete free choice with no
government involvement. Concentration of decision power even in
corporations is also rejected.

3.Capitalism: Private ownership of goods and production allowing personal
profit. Ideally, government involvement is minimal and the free market
determines direction based on supply and demand. Emphasis is placed on
competition and profit.

B.Planned Economy

1.A central authority makes a wide range of decisions pertaining to
production and wages

2.Feudalism: Ownership of all land is held by a central authority (king) who
grants rights to portions of the land based on a contract of loyalty and
service. These people in turn subdivided their land to other individuals
based on contracts of loyalty and service. Lowest are non-land owners who
simply exchange service for protection.

3.Socialism: Collective or government ownership and management of
production and distribution. Emphasis is placed on cooperation and social
service.

4.Communism: A form of socialism where property is held in common; there
is no private ownership. Individuals are held to be equal and share an equal
benefit from the common property.

III.Is one economic system more moral than another?

A.One university professor, Robert H. Nelson, notes that any economic system must
be based on a considerable degree of honesty and altruistic behavior in order to
function.

B.Anarchism fails because it denies the legitimacy of government to exist

1.Romans 13:1-7

a.Government is needed to separate good from evil

2.There will always be products that some will be willing to purchase and
others to sell that are neither good for the individual or for society as a
whole.

a.Recreational drugs

b.Pornography

c.Prostitution

d.Should you be able to hire an assassin, if you can find someone willing
to kill a fellow human?

e.Extortion - paying money to keep that person from harming you

f.There is a whole host of sinful practices that technically would be
available unless government existed to impose a moral standard

C.Capitalism is faulted because it rewards the greedy

1.It should first be noted that greed exists independent of any economic
system. It is true that capitalism does not prevent greed, but then no
economic system can prevent a sin, such as greed.

2.The right to private ownership and decision is noted in the Bible - Acts 5:4

a.No one compelled Ananias to sell his property.

b.No one forced him to contribute it to the disciples

c.His sin was not that he kept a portion of the proceeds but that he
lied about how much he had given.

3.On a related note, it is faulted because it provides no incentive for aiding
the poor

a.It should be noted that it doesn’t prevent the aiding of the poor
either

b.Ephesians 4:28 - Encouragement to earn funds for the opportunity
to aid the less fortunate.

(1)Here is a capitalistic idea: earn more than you need, so that
you have the ability to help the needy.

(2)True, helping the needy has no capitalistic reward, but the
motivation for helping the needy is not financial but
righteous.

(3)Systems where wages are fixed regardless of effort will not
allow this command to occur because you will never earn
more than you need.

D.Socialism's decision making body is prone to corruption

1.Ecclesiastes 5:8 - Don’t be surprised by corruption in government.

2.Because men can be corrupt and because socialism concentrates decision
making power in the hands of a few, the possibility of system being
corrupted is quite high.

3.Where capitalism brings no natural restraint on greed, socialism has
problems with envy.

a.It espouses self-sacrifice, but it is not voluntary. Those who are
more productive are told they must give to all, whether they agree
or not.

b.It is those who are less productive who demand that they share
what the productive earn. This is simply institutionalized envy.

c.“Envy is the desire to not only possess another’s wealth but also the
desire to see another’s wealth lowered tot he level of one’s own.”

4.But didn’t Israel have a form of socialism?

a.What is usually referenced is the fact that all land belonged to God
- Leviticus 25:23

b.However, this was not socialism. On the Jubilee year land reverted
to the original family. There was always an owner of record -
Leviticus 25:28

c.Nor was there a central body deciding what was to be produced,
the amount to be produced, the prices to be charged, or the wages
to be earned.

5.Actually, the Scriptures teach that diversification is better than
centralization - Ecclesiastes 11:6

E.Communism is faulted because it rewards laziness

1.Since income is fix regardless of effort, there is no built-in motivation to
provide additional effort.

a.Any effort provided then becomes one based on righteousness and
not financial - II Thessalonians 3:10

b.Note that in a market economy this rule is built-in.

2.But weren’t the early Christians communistic?

a.It is a mistake to associate generosity with communism

b.In communism, there is no choice about sharing. Everything is held
in common whether you desire it or not.

c.Acts 2:44-45 - Was the sharing voluntary or required?

d.Acts 4:32-37 - Notice that some possessed land (not communistic),
it was sold voluntarily to give to those in need.

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